How to Live Rent and Mortgage Free

I’ve seen financial gurus that cite, as a general rule, you should spend no more than thirty percent of your average gross income on housing. Wait, what, huh, seriously?! How on earth can anyone achieve FIRE if thirty percent of their gross income is spent on housing?

Before you point to technicalities - let me cut you off: I understand that the recommendation is “no more” than thirty percent. I also understand that when most people are directed that they can splurge up to a certain amount on something, they tend to go all out. I mean, as a kid, if my mom told me that I could go to the grocery store and spend “no more” than five dollars on snacks, I certainly wasn’t coming home with a fifty cent snack!

So here’s my link between candy and housing: When most people are told to spend no more than a certain amount on something, in most cases, they spend that maximum amount. But, if you’re interested in FIRE, you can’t behave like “most people.”

Think Outside the Box for Housing

What I encourage you to do when it comes to housing, is to think outside the box. Don’t accept that you can spend thirty percent of your income on housing. Think differently! Consider what would happen if you told yourself that you should spend no more than ten percent of your income on housing? What if (gasp) you even adopted the crazy idea that you should spend nothing at all on housing?!

Well, that’s exactly what Amon and I did on our journey to FIRE. We got creative. We began to think of ways to live rent and mortgage free . . . and we did just that! In fact, we came up with ways to live rent and mortgage-free before we even started our FIRE journey. For more than ten years, we implemented five completely different strategies that allowed us to live rent and mortgage free. And we lived in beautiful homes. Check out our tour of a house we lived in for three years (rent-free) in Japan or check out our homes in the Bay Area that we lived in rent and mortgage free.

Want to know how we did it? Below are the five ways that we lived rent and mortgage free!

1. Resident Advisors

Being a resident advisor is a great way to get your housing paid for while you’re in college. But, you don’t have to be a young college student to be a resident advisor. Amon and I lived in UCLA’s graduate school housing when I was in law school (at the age of 32!). Amon was the only one working at the time and we needed to save money, so we became resident advisors. In exchange for getting free rent and an additional monthly stipend, we were only required to be on call eight weeks out of the year. Only eight weeks! Don’t get me wrong, we got some interesting 2:00 am phone calls during those eight weeks, but it was definitely worth it. If you’re not a student and don’t qualify to be a resident advisor, try applying to be a resident manager of an apartment complex - same concept, you just don’t have to be a student to qualify.

2. Renting Out Empty Rooms

Have an empty room lying around in your house? If so, get a roommate to pay your rent! Shortly after graduating, Amon and I purchased a lease option on a three-bedroom condo. But it was just the two of us and we had two spare rooms. We knew exactly what we wanted to do with those spare rooms - make MONEY by renting them out! Clearly, the con to this is that you have to share your space with strangers (who wants to share a place with a wacka-doodle?!).